Blockchain and IoT

Ok, so you’re just getting to grips with understanding IoT, IIoT and Industry 4.0.

You now also know about smart manufacturing, smart asset management, smart products and a whole lot more around big data. In the background, you are now hearing rumblings about something called Blockchain and how it could be integrated within IoT to deliver a solution for decentralised networks.

Hang on a moment, a decentralised network! What is the issue with a centralised network?

Ecosystems currently depend on a trust broker relationship such as Secure Sockets Layer (SSL). This is the standard security technology for producing encrypted links between web servers and browsers; these can be public or private. SSL encrypts data such as usernames, credit card numbers and passwords; this is the data that only users and the website can decrypt (for example when making transactions or logging into accounts).

Your browser will tell you whether the site you are about to enter is secure - a warning will pop up to say this connection is not a trusted site. Of course, you choose to ignore this, but generally, it’s not a great idea to do so, particularly if you are performing a transaction.

Sorry, gone off a little bit here, back to IoT and Blockchain. Currently, IoT ecosystem communications run on a client-server basis, using trusted brokers and protocols such as the SSL method mentioned above. This has and will continue to be within the domain of general computing and closed smaller ecosystems such as smart homes (a centralised network).

However, with the anticipated growth rates of connected devices, will the current solution stand the test of time? There have been many figures estimated for connected devices by 2020, 50 billion, 100 billion, but now there is a general consensus of 20-30 billion. If you take Moore's Law as a reference and project to the future, you can see that the number of connected devices is going to be huge. Will those centralised networks be able to handle the traffic or will users suffer from bottlenecks due to the sheer amount of demand placed on the system? Just imagine if key critical commands failed to reach their source. It is now common for pacemakers to be controlled remotely and in the future, many more medical devices will become smart. What if these too experienced failure at the point of application? We're talking life and death scenarios.

Sure, you can invest more in terms of hubs and hardware to help overcome issues of data exchange failures. But is the answer to use something that is already available, such as Blockchain technology?

Is there a real problem with Blockchain? Perhaps understanding the technology.

What is pretty odd is that up to now most of the attention on Blockchain is in terms of its use/application as means of controlling cryptocurrency, such as Bitcoin. But cryptocurrency is only a small fraction of the uses for Blockchain.

The real question is what do we actually want from an IoT world? For users, I would state that this is simplicity, security and ease of maintaining assets, plus increased profit. For providers and suppliers, this would be market share, new revenue streams combined with simplicity, security and ease of business. Basically, how do we drive, accelerate and maximise the economic value of IoT? Now we know the answer, what is needed to deliver this?

This is where Blockchain comes in, the requirement for shifting and analysis of big data is the key component for utilising IoT, and the parallel with Blockchain is as a means for the distribution of data.

Some have stated that Blockchain is actually a bigger deal than the internet. So it’s easy to understand why many are getting so excited about combining IoT and Blockchain.

First of all, let’s just remind ourselves of what Blockchain is. A blockchain is a form of a shared distributed ledger using a decentralised network to share and support data transactions between peers or nodes on a network, all transactions are verified between peers to ensure they are not disputed.

Now from IBM – What is IoT with Blockchain?

“The Internet of Things enables such devices to send data to private blockchain ledgers for inclusion in shared transactions with tamper-resistant records. The distributed replication of IBM Blockchain enables your business partners to access and supply IoT data without the need for central control and management. All business partners can verify each transaction, preventing disputes and ensuring each partner is held accountable for their individual roles in the overall transaction”

As mentioned before, because Blockchain is a decentralised network there is no need for a third party to certify the transaction (data sharing, for example) thus enabling direct peer to peer interaction. Just remember Blockchain is distributed not copied, it cannot be corrupted as the whole network would need to be overridden. This is something which would require an immense amount of computing power, also Blockchain checks in with itself every couple of minutes and no single node can differ from others, they all must be of the same value or in the same state.

Blockchain will also allow for time record stamping and an inability to change data without each node being aware, all nodes must match, so security is much less of an issue and the digital infrastructure will remain intact.

In an Industrial IoT environment, Blockchain will be able to provide security for IoT devices and make device management easier. The current and retro states of devices and or operation can be recorded and shared, network traffic remains uncluttered and stable.

One industry that is making leaps to exploit the potential of Blockchain is financial services, in particular, the insurance sector. The emergence of collaboration between service-related industries and technology industries are moving into new realms as we speak.

In order to reach the magnitude and realise the ambition for the IIoT (Industrial Internet of Things) Blockchain is certainly a front-runner in the quest of getting us there. Many governments, although slow initially on the uptake, are now looking at how the technology around IoT and Blockchain can help their economies and industry remain competitive on a global scale.

So what else is on the horizon? Well, for a start, how about the convergence of AI and Blockchain? A centralised intelligence with a decentralised application, why not.

Recent news covers how AI has helped to discover new planets in a distant solar system and provide earlier diagnosis of serious medical conditions.

AI, IoT, Neural Networks, Blockchain and further forward, Quantum Computing, it really is in simplest of business terms “Blue Sky Thinking”